REBUILDING REGIONALAUSTRALIA

STATEMENT BYTHE HONOURABLE JOHN SHARP, M.P.,

MINISTER FOR TRANSPORT AND REGIONAL DEVELOPMENT20 AUGUST 1996

AUSTRALIAN GOVERNMENT PUBLISHING SERVICECANBERRA 1996

Commonwealth of Australia 1996

ISBN 0 644 44583 1

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, nopart may be reproduced by any process without prior written permission from the AustralianGovernment Publishing Service. Requests and inquiries concerning reproduction rightsshould be directed to the Manager, Commonwealth Information Services, AustralianGovernment Publishing Service, GPO Box 84, Canberra ACT 2601.

Produced by the Australian Government Publishing Service

iii

CONTENTS

OVERVIEW ...............................................................................................................1

SUPPORTING REGIONAL PEOPLE ......................................................................3

Support for Rural Families.................................................................................3

Service Delivery.................................................................................................4

Employment.......................................................................................................5

Health................................................................................................................6

Health and Related Infrastructure in Indigenous Communities ...........................7

A Safer Community...........................................................................................7

SUPPORTING BUSINESS.........................................................................................7

Small Business...................................................................................................7

Farm Businesses................................................................................................8

Diesel Fuel Rebate Scheme................................................................................8

Research and Development................................................................................9

Economic Management......................................................................................9

Microeconomic Reform......................................................................................9

Recognising Leadership...................................................................................11

Facilitating Major Projects...............................................................................12

Advancing Northern Australia .........................................................................13

Tasmanian Package .........................................................................................13

Understanding Our Regions .............................................................................13

MAKING THE CONNECTIONS ............................................................................14

Better Communications....................................................................................15

Efficient Transport...........................................................................................16

Arts and Broadcasting......................................................................................16

Export Markets ................................................................................................17

PROTECTING THE CAPITAL BASE ...................................................................18

Forests.............................................................................................................19

Native Title......................................................................................................20

TABLE 1: OUTLAYS MEASURES ........................................................................23

TABLE 2: REVENUE MEASURES ........................................................................24

1

REBUILDING REGIONAL AUSTRALIA

OVERVIEW

The Liberal-National Government’s priority on families and small business is central toits commitment to regional Australia. It is based on the need to encourage and enhancethe development of regions and to improve the standard of living of all Australians —no matter where they live. The Government’s ambitious economic reform agenda willmaximise both the potential of regions and the benefits they can derive from thesereforms.

The Coalition Government has not simply sat idly as regional Australia continued tosuffer from neglect. It has implemented real measures to benefit regional Australia. Injust six months, the Coalition has announced a new extended drought package, a moresensible forest package giving both jobs and environmental protection, maintained theDiesel Fuel Rebate Scheme, held the rural Finance Summit and cut the rate ofprovisional tax. This Budget continues the pace.

The Budget contains a number of important initiatives for regional Australia. Thehighlights include:

• less pressure on interest rates for families and small business through a majoreffort to reduce the Budget deficit;

• a $1 billion family tax initiative which will give families more choice about workand parenting;

• a $150 million per annum reduction in capital gains tax for small business toprovide incentive to invest and to employ;

• $450 per annum assistance for families to take out private health insurance;

• a new $148 million Road Safety Black Spot programme to improve roads,50 per cent of which will be spent on rural roads;

• the Supermarket to Asia Strategy to develop new markets for food exports;

• $30 million to maintain core environmental and natural resource programmesin 1996-97 pending the partial sale of Telstra;

• an additional $49 million to accelerate Regional Forest Agreements;

• a $1.6 million increase in assistance to isolated families under the Assistance forIsolated Children scheme;

• restoration of CSIRO funding;

• an $11 million expansion of access to the Special Broadcasting Service networkto a further five regional areas by 1999;

2

• a $90 million extension of drought assistance;

• a cooperative joint venture to help rural and remote communities establish creditunions;

• an integrated shopfront for services provided by the Departments of SocialSecurity and Employment, Education, Training and Youth Affairs;

• the lodgement of Medicare claims through selected pharmacies;

• an information and counselling support service for families and young people;

• an enhanced focus on facilitating major projects in regions, including theestablishment of a Ministerial Working Group on Regional Affairs ;

• the development of six University departments of rural health ; and

• a $20 million reduction in FBT on remote area housing.

The value of these initiatives is not measured in their cost alone but in the contributionthey make to the economic prosperity of regions and the quality of life of theircommunities.

The Commonwealth has a clear and valuable role to play in enhancing the prosperity ofregional Australia. This role derives from its responsibilities for national economicmanagement, its leadership role in economic reforms, and the need to ensure that itspolicies and programmes meet the needs of regions.

The Government’s strategy for regional Australia will maximise our regions’ potentialby:

• ensuring that regional communities have the support and services they need;

• building an environment where businesses have the flexibility, cost structure andincentive to invest and grow;

• getting the economy working so there are fewer constraints on sustained growth;and

• providing a sound basis for development through better management of the land,water and resources and by providing greater investment opportunities in regionalAustralia by addressing the causes of economic uncertainty.

3

SUPPORTING REGIONAL PEOPLE

Support for Rural Families

The family unit is the fabric of society, regardless of location. The centrepiece of theGovernment’s election commitment to families is the Family Tax Initiative . Itprovides additional support to families where there is one breadwinner and opens upnew opportunities for families to make decisions between work and care of children.

The Family Tax Initiative will direct over $1 billion in additional assistance over a fullyear to almost 2 million families with combined incomes below about$70,000 per annum. Families which qualify will receive an increase in their tax freethreshold of $1000 per annum per eligible child. Single income families with childrenunder five will receive an additional increase to the tax threshold of $2500.

The majority of eligible families will be able to access assistance through the taxationsystem, through a reduction in PAYE deductions or provisional tax for one taxpayingpartner, or by one partner claiming it only when lodging a tax return at the end of thefinancial year. The Government’s concerns to ensure that low income families also getthe help they need means that they may claim an extra fortnightly cash payment, knownas the Family Tax Payment, from the Department of Social Security instead of the taxconcession.

The Government is committed to ensuring that families have access to affordable childcare. Specific strategies are in place to assist families in geographically disadvantagedareas, including the retention of some capital under the New Growth Strategy for theestablishment of services in rural and remote areas.

The Government is concerned about the stress rural and regional families haveexperienced over the last few years. For too long they have suffered under intensepressure without access to adequate counselling and support services. In this Budgetthe Government has developed an integrated approach to providing the support youthand families under pressure need. This integrated package will provide assistance toaddress the particular pressures of family life, for example, when young parents firststart to cope with raising young children or when adolescent children run away fromhome or turn to self harm. Specific strategies incorporate:

• an extra $2 million per annum for marriage and relationship education;

• $4.3 million will be provided over two years for parenting education to developcommunity based programmes aimed at prevention of violence, resolution ofconflict and increased skills in parenting and family relationships;

• an additional $18 million over three years for the National Youth Suicide Strategyto reduce youth suicide and self harm;

• $8 million over two years for the Youth Homelessness Pilot Programme to assistwith family reconciliation and to re-engage young homeless people in family, workand education within their communities; and

4

• an extra $5 million per annum for the Emergency Relief programme which enablescommunity groups to provide one-off cash assistance to people in need.

The Government is aware of the special problems that people in remote areas have inproviding their children with the same educational opportunities as other Australians.The Government is enhancing the Assistance for Isolated Children (AIC) scheme andmaintaining the additional assistance to indigenous students via ABSTUDY. We havedelivered on our election commitments to provide additional assistance to isolatedfamilies under AIC. The Correspondence Allowance, paid under AIC, has beenincreased to $1000 per annum for primary students and $1500 per annum for secondarystudents and the non means-tested Boarding Allowance has been increased to$2900 per annum. The Government has also indicated its intention to introduce aYouth Allowance from 1 January 1998 which will result in an income support systemthat better meets the needs of young people today and which recognises that moreyoung people are mixing labour force participation with training or education.

In light of concerns about the hardship suffered by rural farming families, theGovernment will establish a Special Rural Task Force to review the impact of theSocial Security assets test to ensure farm families are not disadvantaged. In particular,it will look at the assets test for farmers who wish to retire and pass the farm on to theirimmediate relations who are already working the farm and drawing their primaryincome from it. The Task Force will also look at how the assets test affects farmers whocan not sell their property due to market conditions, who stay on small or non-viableland holdings which cannot generate income beyond the age pension limit, or who cannot subdivide and sell their land due to government restrictions.

Service Delivery

People in the regions have a right to expect good service and access to Commonwealthprogrammes, including through innovative private sector mechanisms.

Access to the full range of government services is to be streamlined with an emphasison integrating service delivery and access for customers. The Government will providethe same services at a lower cost. Putting in place commonsense efficiency measuresmeans that people of regional Australia will have access to the same range of serviceswhile dealing with fewer agencies.

A new, integrated shopfront will initially cover all the services provided by theDepartment of Social Security and a number of services currently provided by theDepartments of Employment, Education, Training and Youth Affairs and Health andFamily Services. It will have the potential to add to these and become a ‘one-stop shop’for a wide range of government services. For example, from the beginning of 1998families using child care services will only have to deal with the new agency whereas atpresent three agencies are involved.

Selected pharmacies will be able to offer a direct fax service to the Health InsuranceCommission to process Medicare payments for reimbursement by direct deposit into abank account or by cheque payment.

5

The Australian Taxation Office (ATO) is participating in ‘one-stop shop’ facilities (incombination with other small business bodies such as State Government Small BusinessOffices) to provide service and tax advice to small business in regional Australia. Thearrangements are initially being piloted in locations where regional tax offices werepresent. If the pilot programme is successful the ATO will consider similararrangements in other regional centres. Alternative service delivery arrangements (forexample, payments of tax through post offices and electronic return lodgement) willmeet the needs of taxpayers in regional locations.

CreditCare is a cooperative joint venture between the Commonwealth Government andthe Australian Credit Union Movement. Its purpose is to assist rural and remotecommunities without banks or similar financial services to establish their own creditunions or, where practicable, to assist the communities to gain access to the services ofexisting credit unions.

Employment

Access to training and employment is crucial to the advancement of all regions. TheGovernment is changing labour market assistance arrangements to make them simplerand better for everyone: jobseekers, employers, and employment assistance providers.These arrangements will tailor assistance to the needs of individual jobseekers andensure that it is focussed on getting people jobs. By December 1997, most labourmarket programmes will be ‘cashed out’ into a flexible pool of assistance and acontestable employment placement market will be created. In the interim, the currentcomplex and confusing array of labour market programmes will be streamlined intofour main groupings.

The new employment placement market will offer clear incentives to place jobseekersinto real jobs, rather than endless cycling through a multitude of training programmes.Effective assistance of this nature will mean that more jobseekers are helped into realjobs before they become very long-term unemployed. The new arrangements will alsooffer employers a wider choice of agencies with which to deal in meeting theirrecruitment needs.

Although most labour market programmes will be ‘cashed out’ into a flexible pool ofassistance, the Government recognises the need to provide special employmentassistance to jobseekers in depressed regional and remote areas. A higher level offunding per client will be available where appropriate in the new employmentplacement market, and dedicated funding for depressed regions will enable Regionaland Community Employment Councils (RCECs) to develop and implement strategiesto improve the employment and skills base of regions with high levels ofunemployment.

The major focus of the proposed Modern Australian Apprenticeship and TraineeshipSystem (MAATS) is on a significant expansion in entry-level training opportunities foryoung people, providing them with greater access to real on-the-job and off-the-jobtraining in a wider range of areas of career development. MAATS is about removingjob-destroying regulation in the training system, giving industry greater leadership andgiving enterprises greater incentive to take on apprentices. MAATS will modernise and

6

extend the proven concept of apprenticeships, to make them relevant to the needs ofyoung people and industry in the 21st Century.

The Commonwealth will develop MAATS in partnership with industry and the Statesand Territories, working at the local and regional level. The Commonwealth will beworking with the States to streamline the processes for approval of apprenticeship andtraineeship arrangements, which are at present costly and cumbersome.

As far as possible, the operation of a streamlined regulatory system should be devolvedto the regional and industry level. The Government will pilot in 1996-97 single pointcontact centres in regional Australia to link prospective apprentices and trainees withsuitable local employers and service their needs. These centres may be extended afterdiscussion with States and Territories on appropriate locations.

In addition, the Federal Government will provide more than $40 million over the nextthree years for the Green Corps. This will allow 3500 young Australians to have theopportunity to take part in projects that will develop their own career prospects and helprestore the environment. Young Australians aged between 17 and 20 years will workfull time on projects for 26 weeks with an option to extend for a full year.

Health

The Private Health Insurance Initiative will give rural families a real choice abouttheir access to private health care. By assisting families and individuals to self insure,the incentive relieves the pressure on the public hospital system by helping to reducewaiting lists. The initiative also recognises the benefits to the community which followfrom people being able to insure for ancillary services and items not covered byMedicare, including preventive health measures. The Commonwealth will be providingincome tested financial incentives from 1 July 1997 of up to $125 per annum for singlesand $450 for families.

The Government will improve access to health care for people living in rural andremote Australia. All elements of our election commitment to address the crisis in therural health workforce have been funded in full. Strengthening the capacity of the ruralhealth workforce is a top priority, $18 million will be spent over three years toestablish University Departments of Rural Health. The Government has established theJohn Flynn Scholarships, a vacation scholarship programme for medical students whoundertake supervised practice in a rural or remote community. We will provide taxationsupport for Community Medical Scholarship Schemes. Further initiatives includesupport for rural locum services for General Practitioner’s (GP’s) and specialists, and apackage of $20 million per annum for rural areas and hospitals to support research anddevelopment, rural infrastructure, training for rural doctors and career employment ofnon-specialist hospital doctors. The GP Rural Incentives programme will continue to befunded at around $15 million per annum.

These initiatives are part of a longer term commitment to encourage doctors to servicerural communities. In addition, the Government will fund relevant organisations toimprove access by remote and rural communities to appropriate health services throughthe support and training of nurse practitioners.

7

We have also focussed on preventive health initiatives such as screening andmammography services for breast cancer. As indicated in A Healthy Future, we arewidening the focus of the programme to ensure that women living in regional Australiahave improved access to screening.

Health and Related Infrastructure in Indigenous Communities

Despite a dramatic increase in expenditure under Labor, Australia’s indigenous peoplecontinue to suffer severe socio-economic disadvantage. The Government is addressingthis by giving proper priority to housing, health and employment. Spending in theseprogrammes has been protected, and resources will be targeted to the most needycommunities, particularly in rural and remote Australia. We will apply these resourcesin a way that will directly benefit individuals and families. Spending will be maintainedon essential health-related infrastructure and allocated in a strategic way to ensuresignificant and sustained improvements in living standards. Extra funds for health caremeans that many communities will, for the first time, have access to basic healthservices. Funding will also be maintained for the full number of participants inCommunity Development Employment Projects, the ‘work for the dole’ scheme that isthe major source of work in many indigenous communities.

A Safer Community

The Commonwealth and the States and Territories have agreed on a tough and uniformapproach to gun control which will deliver to Australians — including those in ruraland non-metropolitan Australia — a safer place to live. These historic measures willavoid any slide into a ‘gun culture’ in this country.

The new controls will still allow individuals to own appropriate guns for a range ofpursuits and are aimed at achieving the permanent removal of a large number ofrapid-fire guns from the community. As well as a legislative ban, there will be asignificant financial incentive for people to hand in these guns — through fair andadequate compensation financed by the Commonwealth's gun levy. Proper allowancefor primary producers to cull feral pests has been made through allowing access tocertain banned categories of guns where they can satisfy police of an appropriate need.

SUPPORTING BUSINESS

The vitality of small business is important for the national economy but even moreimportant in the regions. A quarter of Australian small businesses operate in rural areasand they are the key to jobs and prosperity.

Small Business

One of the Government’s first actions on gaining office was to reduce the provisionaltax uplift factor to reduce the cash flow burden on small firms, including farmbusinesses.

The Government will also be providing an exemption from fringe benefits tax forprimary production employee housing in remote areas. Changes to the Capital Gains

8

Tax legislation to provide rollover relief when the assets of small businesses are sold,and the proceeds are invested in the same or another like business, will take effect fromthe beginning of next financial year.

Another early priority for the Government was implementing its 100 day action plan forsmall business. The Small Business Deregulation Task Force will report on1 November on how to achieve a 50 per cent cut in red tape. The June National SmallBusiness Summit has produced a Charter of Principles for regulatory practice andcommitments to improve licensing and registration processes. The States have agreed tocooperate with the Commonwealth to reduce unnecessary business regulation. Astrengthened Legislative Instruments Bill is before Parliament and aims to ensure thatnew regulation is properly evaluated and transparent.

Farm Businesses

An activating committee chaired by the Parliamentary Secretary to the Minister forPrimary Industries and Energy, Senator Brownhill, has been established to address theissues discussed at the Rural Finance Summit held in July. The Committee will look atfinancial incentives and disincentives, the business environment, farm adjustment andsocial welfare, and the finance industry.

The Government remains committed to facilitating adjustment and enhancing thecompetitiveness of the farm business sector. Overall, estimated funding for the RuralAdjustment Scheme (RAS) programme will increase over actual expenditure in1995-96. Both normal and regional RAS funding will increase. The fall in DroughtExceptional Circumstances (DEC) funding reflects improved climatic circumstances.However, the Government has maintained its commitment to provide assistance tothose farm business continuing to experience exceptional drought conditions inQueensland and New South Wales. It has also extended drought exceptionalcircumstances assistance to new areas affected in Western New South Wales.

An estimated $48.4 million will be spent under the Rural Adjustment Scheme (RAS)Drought Exceptional Circumstances (DEC) provisions in 1996-97 to support long termprofitable farm business currently affected by drought. A further $87.3 million will bespent on the Drought Relief Payment (DRP) for farm family income support.

The DEC assistance under the RAS will assist long term viable farm businesses to meetthe impact of prolonged and severe drought. DRP assistance will help provide basicnecessities to farm families whose incomes have been severely reduced by drought.

Diesel Fuel Rebate Scheme

The Government has reaffirmed its election commitment to continue to support theprimary production, mining and ‘other’ sectors through the Diesel Fuel Rebate Scheme(DFRS).

In the current fiscal climate, however, the growth of outlays under the Scheme is ofconcern to the Government. This concern is due both to a broadening of eligibility in

9

the mining sector and, more generally, over claiming (an issue raised in May 1996 bythe Australian National Audit Office’s Performance audit report).

Following consultation with industry, the operation of the DFRS is to be revamped from1 January 1997 to give legislative effect to restrictions on eligibility under the miningcomponent of the Scheme. In addition, the Government will continue to effectadministrative changes to reduce the level of over claiming of the rebate.

The retention of the DFRS will be of significant benefit to regional Australia throughthe assistance it provides to primary industries — industries which generate a largepercentage of the jobs in both regional and urban Australia.

Research and Development

Research and development plays a major role in improving the internationalcompetitiveness of our industries. CSIRO’s funding base will be increased by$115 million over four years, benefiting industries in rural and regional areas where asubstantial number of CSIRO’s research projects are focussed.

Other assistance for research promised in the Government’s election commitments,amounting to some $340 million over four years, will benefit industries in rural andregional Australia. The Government reaffirms its commitment to match industry leviesfor rural research and development up to 0.5 per cent of the gross value of ruralproduction.

Economic Management

The Government’s fiscal policies will help take the pressure off long-term interest rates.The reduction in official interest rates on 31 July will benefit regional economies bytaking pressure off farmers, small business and householders. It has already beenreflected in lower mortgage and prime lending rates, and comes on top of the reductionsin mortgage rates earlier in the year in response to increased competition within thefinancial sector.

The 1996-97 Budget includes the means to meet the Government’s electioncommitments. In considering these commitments, however, the Government could notresponsibly ignore the substantial underlying budget deficit it inherited. Accordingly,the Budget also includes a thorough overhaul of all expenditure to ensure that taxpayerscontinue to receive value for their tax dollar.

Reducing the cost of the Commonwealth Government will ultimately benefit allAustralians through less pressure on taxation, interest rates and the current accountdeficit. Importantly, it will result in a smaller legacy of debt to our grandchildren.

Microeconomic Reform

The Government will increase the pace of microeconomic reform. Sensiblemicroeconomic reform will yield lower prices, improved services and a more flexible,resilient economy. We have seen the results from the current reform programme of

10

lower prices from tariff reductions, and cheaper airfares and phone calls, combinedwith greater choice in services. For example, competition between domestic airlinessince 1990 has seen average airfares fall by around 20 per cent, with more frequent andimproved services.

But the Government has also faced up to the issues the previous government put in thetoo hard basket: badly needed industrial relations, waterfront and other transportreforms. It has in train effective policies to tackle these issues. Productivity on theAustralian waterfront remains substantially below world’s best practice and is slippingfurther behind. For example, crane rates at Asian ports are between 33 per cent and183 per cent higher than crane rates at Australian terminals. A cheaper and quickerwaterfront will make it easier for regional producers to compete in export markets, andso provide growth and jobs.

The Industry Commission Report Impediments to Regional Industry Adjustment foundthat industrial relations was a key issue for the productivity of regions and for regionalemployment.

The reforms to Australia’s outdated, overregulated, inflexible labour market arefundamental to the expansion of regional and rural economies and their businesses. Itwill be much easier for employees to form a direct relationship with their employerwithout the uninvited involvement of a trade union. Wages and conditions will bedetermined as far as possible at the workplace level within a framework of minimumconditions. Employees who enter into workplace agreements will not receive less takehome pay then they would have received under the relevant award. Compulsoryunionism and secondary boycotts will be outlawed, the latter through the reintroductionof secondary boycott provisions to the Trade Practices Act. The unfair dismissallaws — which in their current form are a disincentive to employment growth,particularly in small business — are also being reformed.

The Government’s workplace reforms will provide impetus to reducing costs andincreasing productivity in the meat industry. Our meat processing costs are up to threetimes higher in Australia than those in similar US plants and twice those of NewZealand plants. The Industry Commission found that reform of restrictive workpractices could reduce meat processing costs by at least 8-10 per cent. Efficient meatproducers should not have to bear such additional imposts which accrue after theproduct leaves the farm.

The Minister for Primary Industries and Energy, John Anderson, has announcedarrangements for implementation of the government's reforms for the AustralianQuarantine Inspection Service (AQIS) meat inspection programme. A task force hasbeen established to critically review AQIS’ overhead costs and operations and examinethe progression to company based inspection based on quality assurance systems. Thereforms when implemented will deliver further savings to the meat industry.

The application of the competition policy principles and the creation of nationalmarkets will allow private firms to compete more effectively, resulting in lower costsfor all. In applying the competition principles the Government will carefully assess thecosts and benefits. Where it can be demonstrated that anti competitive arrangements are

11

the best way to serve the public interest they can still be used. We have retained thesingle desk for wheat exports for the Government’s first term and wheat marketingarrangements will be reviewed in 1999-2000.

Clearly defining the roles and responsibilities of the Commonwealth, State and localgovernment is an important part of improving public services. The shift to moreflexible funding arrangements will allow State governments to tailor service delivery tolocal needs and achieve better standards of service and lower costs. Funding for localgovernment has been maintained in real per capita terms and local government has notbeen asked to contribute towards the Commonwealth’s fiscal task.

SUCCESSFUL DEVELOPMENT IN THE MID-MURRAY REGION

The Mid-Murray region (encompassing Shepparton in Victoria through toDeniliquin in NSW) is a region that has attracted significant new investment and hascaptured opportunities while adapting to substantial structural pressures. TheGoulburn Valley sub region for example:

• has attracted private capital investment of $350 million over the last four yearsin the value-added food sector, making it one of Australia’s leading regionalexport centres;

• produces some $1.5 billion worth of food products annually, with around$1 billion of production for export; and

• expanded its industry base over the last five years from a heavy reliance onhorticultural products to a major producer of value-added dairy products:

— the Mid-Murray region now accounts for some 25 per cent of Australia’sdairy production by value; and

— the region has captured investment to fund critical water infrastructureprojects and is spending over $1 million to fund a research and developmentinitiative that addresses electrical supply problems.

Recognising Leadership

Successful regions internationally and in Australia are those which have focused theirfuture development on growth and diversity through export and trade. Success requiresregions to create a world class business environment in which businesses will want toinvest and in which those businesses can clearly see a secure future. This Governmentunderstands that regional leadership provides the key to adjustment and change.

The Government will work closely with regional leaders, especially in business. Stateand local governments are also playing a significant role in advancing the interests ofregions, in particular through funding support. The Commonwealth will workcooperatively with them to ensure that the current support mechanisms for regional

12

leadership evolve in a way that will ensure maximum support for the needs of businessand regional communities. In collaboration with the States, the Commonwealth willinvestigate options for networking and sharing experiences between regions to enhancethe capacity of leaders to respond to the challenges and opportunities facing theirregions.

Making better use of the talent and resources available has been an objective of theregional development organisations (RDOs). Even though the Government has decidednot to fund new projects under the former Regional Development Programme, allexisting contractual commitments will be honoured, recognising the energy andcommitment demonstrated by regional leaders.

Facilitating Major Projects

The Commonwealth has a significant role in facilitating regional projects. ThroughMajor Projects Facilitation status granted by the Minister for Industry, Science andTourism, the Commonwealth works closely with major project proponents to ensurethat:

• information required to satisfy the Commonwealth approval processes is promptlyprovided;

• all relevant government processes (Commonwealth and State/Territory) arecoordinated so that, as far as possible, they occur simultaneously and withoutduplication and conflict; and

• Commonwealth agencies respond quickly to decisions requiring possiblegovernment support and interpretation of regulatory requirements.

The Minister and Parliamentary Secretary for Transport and Regional Developmentwill work to address specific impediments and bottlenecks identified by proponents ofregional projects which have national significance.

The Government will work to solve problems and difficulties in the developmentalstages of these projects and help in brokering decisions by:

• brokering regional needs by providing linkages between regions and the keyinfluences in economic development, including between project proponents and theinvestment community; and

• identifying relevant data and information held by Commonwealth agencies andinvestigating ways of improving regions’ access to this information.

The Government will establish a Ministerial Working Group on Regional Affairs tobe chaired by the Minister for Transport and Regional Development, to ensure that theneeds and performance of regional areas are understood.

Funding of $1.2 million over four years has also been provided in the Budget tofacilitate the development of minerals resource projects on a coordinated regional basis.

13

The initiative is intended to provide a ‘one-stop shop’ for project approvals and bettercoordination of Commonwealth and State services. Where appropriate, additionalresource assessment work integrating scientific, economic and technical aspects will beundertaken for selected regions.

Advancing Northern Australia

Positioned on the edge of the world’s fastest growing and most dynamic economicregion, the Asia-Pacific, Northern Australia is well placed to take advantage of themarket opportunities in this area. The Government will respond to the Wran report andwork with the Northern Territory Government and community to investigateopportunities to increase international awareness of Darwin’s potential and develop theservice sectors. In particular, through a revitalised Northern Australia MinisterialCouncil, the Government will work to maximise the benefits from economicdevelopment across State borders and ensure a clear focus on transport priorities.

Tasmanian Package

The Government is committed to achieving equality for Tasmanians in developingopportunities for their State. Initiatives include:

• $7 million over three years for the revitalisation of Launceston, particularly theinner city (focussed on the redevelopment of the Inveresk railway site);

• $8.8 million over three years for Tasmanian Water Quality Initiatives which willimprove the water quality and social amenity of the Derwent, Tamar, Huon, Kingand Queens Rivers and Macquarie Harbour;

• $33 million over four years for the Bass Strait Passenger Vehicle EqualisationScheme which will provide a vehicle rebate for motorists thereby encouragingtourism and employment in Tasmania;

• a five year funding plan for the Tasmanian Freight Equalisation Scheme, followinga review of the scheme’s current rates of assistance to ensure shippers receiveappropriate compensation for the cost disadvantages of shipping across Bass Strait;

• an update of the 1976 Callaghan report to review Tasmania’s industry andemployment opportunities;

• $150,000 over three years for the Australian Axemen’s Hall of Fame; and

• $2.5 million over three years for the International Antarctic Centre.

Understanding Our Regions

A comprehensive understanding of regional economic performance helps regions focuson performance and is a powerful tool for regions in marketing their strengths andopportunities to potential investors.

14

There are many sources of data on economic performance held by Commonwealthagencies, but there are also difficulties in accessing data at the regional level.The Government will work to make data available at the regional level, to enhanceeconomic assessments, performance benchmarking, and the implementation ofmarketing strategies to support investment growth.

15

MAKING THE CONNECTIONS

Today it is more important than ever for people in the regions to develop and maintaincommercial linkages to the information, services and markets they need to prosper andgrow. Equally important is the building of educational and cultural bridges throughimproved services and new technology.

Better Communications

Communications are not only an essential tool for business, they also provide vitalsocial and educational links for rural and remote areas.

The Government has given a high priority to drafting legislation to implement an open,competitive telecommunications regime from July 1997. This will enable thedevelopment of a strong telecommunications industry offering better levels of service atlower prices. The opening of the telecommunications sector to competition has alreadydelivered benefits Australia-wide. For example, because of innovative charging andaggressive competition, STD charges fell by 9 per cent in 1994-95.

The partial privatisation of Telstra is one of the key elements in our broadertelecommunications policy. The sale of one-third of Telstra will make it subject to thescrutiny of the market and, as a result, more responsive to its customers and a moreefficient company.

The universal service obligation in the Telecommunications Act guaranteeingcustomers in rural and regional Australia standard service at an affordable price, hasbeen reinforced in the Telstra sale bill.

The support we have had from people in rural Australia for this policy initiativedemonstrates an understanding that, far from their services being under threat, theystand to gain improved service, as well as a genuine long-term capital investment inAustralia’s environment.

Importantly, the Government is also:

• reviewing the definition of a ‘standard telephone service’ to reflect new technologyand changing community needs; and

• identifying options to ensure rural and remote areas have access to high qualitytelecommunications services, enabling high speed transmission of data.

Through our joint funding of the Farmwide Online Services pilot project with theNational Farmers Federation, Telstra, On Australia and IBM, 1000 people living inrural and regional areas all over Australia will be connected to online services and theInternet for $5 per hour and the cost of a local phone call. This will give participantsaccess to the wealth of data through the Internet and allow for the development oftailored rural services online such as machinery sales, real time stock prices, foreignexchange rates and the weather. In addition, private sector service providers areestablishing greater local call access to the internet in rural and regional Australia.

16

The House of Representatives Standing Committee on Communications, Transport andMicroeconomic Reform is conducting a review of Australia Post’s community serviceobligations, in particular to rural and remote areas. It is expected to report inSeptember 1996. As part of the inquiry, the Committee will consider the establishmentof a Charter of Responsibilities for Australia Post. It will include minimumperformance standards, delivery times, retail services and postal services for rural andremote areas.

Efficient Transport

The Government is conscious that there needs to be a strategic approach to improvetransport infrastructure so goods can reach markets efficiently and at the lowest costpossible. A lower cost transport system will reduce many of the financial costsassociated with living in the regions.

We plan to create a competitive environment in rail infrastructure — competition willproduce higher quality lower priced services for users. Therefore, we are encouragingprivate participation in rail services and will work towards establishing rail trackarrangements to facilitate the entry of new operators to inter-State rail services.

The Government allocated more than $800 million in 1996-97 for construction andmaintenance of the National Highways and Roads of National Importance. The fundingincludes $75 million for the Pacific Highway, thereby confirming the Government’selection commitment to upgrade this highway. The highway and roads programme is ofparticular benefit to regional Australia, with the majority of funds spent to provideimproved links from rural and provincial centres to cities and major ports.

In addition, the Government has established a Road Safety Black Spot programme ofnearly $150 million over the period to the year 2000 to help cut the road toll. Theprogramme explicitly recognises there are rural road safety problems and directs50 per cent of funding to rural roads, a much higher proportion than under the previousgovernment’s discontinued programme.

The Government’s general industrial relations reforms will be a key driver of reform inthe waterfront and shipping sectors and will set a framework through whichproductivity, performance and cost improvements can be achieved.

The House of Representatives Standing Committee on Transport is currently holdingpublic hearings as part of its inquiry into the air freight capacity of regional airports.The Committee’s report will identify the current capacity of regional airports, togetherwith the potential for enhanced capacity. Its findings will be of major interest toregional exporters, particularly those exporting time-sensitive goods such asperishables.

Arts and Broadcasting

The arts and cultural pursuits are particularly important in enhancing life in regionalAustralia. Through the successful cultural access programmes, Playing Australia andVisions of Australia, Australians outside capital cities are able to experience the best in

17

Australian performing arts and exhibitions. The Regional Touring Fund has beenestablished to assist Playing Australia and Visions of Australia by subsidising travelcosts to regional areas. The new Festivals Australia programme is already having asignificant impact in rural and remote areas by providing support for increased culturalactivity at regional festivals.

The Government’s strong commitment to developing the arts in regional Australia isdemonstrated by the introduction of a new Regional Arts Fund. Administered by theAustralia Council, the fund will provide greater opportunities for artists and artsorganisations outside major population centres to undertake creative projects.

Access to broadcasting services for rural areas will be improved by the expansion of theSpecial Broadcasting Service network into a further five regional areas over the nextthree years. Importantly, the terms of reference for the review of the ABC’s role andfunctions will pay special regard to the needs of rural and remote communities. TheGovernment has instigated a process whereby all communities can make submissions tothis review.

Export Markets

Our approach to strengthening connections is not confined to the domestic arena. Weare committed to deepening the commercial and economic linkages between Australiaand countries in our region to open up new business and growth opportunities forregional Australia.

Tapping the considerable potential for increased food exports to Asia will deliverbenefits to regional Australia through new opportunities, better returns and more jobs.The entire food industry chain will benefit, from farmers to processors to serviceproviders and exporters. We are confident that by working together the Governmentand the food industry can overcome the key impediments to success in the Asianmarkets. One of the crucial elements will be effective rural leadership in identifying andaddressing the main obstacles.

The Government has provided funding in the Budget for the development of aSupermarket to Asia Strategy. Further details will be announced by the PrimeMinister shortly.

The Government is working hard to improve market access for Australian regionalexporters. Bilaterally, we have negotiated airfreight flights between Australia andIndonesia (a growing market for Australian fresh produce), a new trade agreement withMalaysia and a food inspection agreement with New Zealand. We have also establisheda government market development task force to review priority markets and developstrategies to increase our share of these markets.

We are pressing APEC members, each of whom has now tabled an initial action plan ofhow free trade is to be reached by 2010-2020, to include new opportunities forAustralian exporters. On the multilateral front we are preparing for new negotiationsunder the World Trade Organisation, including working with the Cairns group to bringdown barriers to our agricultural exports.

18

PROTECTING THE CAPITAL BASE

One of the key challenges this nation faces is to preserve its natural environment for thebenefit of our children and grandchildren. The Government is committed to putting inplace structures that will produce jobs and rising living standards through economicgrowth that is environmentally sustainable.

The real underlying material wealth of Australia, the natural resource base, isdepreciating. We have been under-investing in ‘repairs and maintenance’ tocompensate for the depreciation of the natural capital which underpins our materialwealth.

Little of our natural environment has escaped modification, and what remains is underincreasing pressure. It is estimated that seventy percent of all native vegetation has beenremoved or significantly modified, with substantial clearing during the last fifty years.Once widespread species are declining. Many of our wetlands have disappeared and thewater quality and flows of our key rivers are dramatically reduced. For example, flowsat the mouth of the Murray River approximate drought levels two years in three,compared with one year in 20 under natural conditions. The quality and health of oursoils has also suffered, through erosion, salinity, loss of structure or acidification.

The community has responded well to the challenge of improving management of ournatural resources. The Landcare movement, for example, has grown rapidly and todaythere are some 2500 voluntary Landcare groups spread nationally. The movement issupported by the Federal and State governments in partnership with the community.But these resources are not sufficient. Governments must do more if we are to besuccessful.

The Government will spend an additional $1.15 billion over the next five years on themost integrated and far-reaching package of conservation and natural resourcemanagement initiatives this country has seen.

The centrepiece of the Government’s environment package is the Natural HeritageTrust of Australia Reserve (the Trust). The Trust will be sourced from the partial saleof Telstra, and will result in a major transfer of capital for investment in therehabilitation of Australia’s natural capital.

Legislation establishing the Natural Heritage Trust of Australia Reserve has beenintroduced into the Commonwealth Parliament, with $700 million from the Trust to beused to fund five capital projects:

• a National Vegetation Initiative to reverse the long term decline in the extent andquality of Australia’s native vegetation cover, with funding of $318 million overfive years;

• the rehabilitation of the Murray-Darling Basin through the implementation of theMurray-Darling 2001 project, with funding of $163 million over five years;

• a National Land and Water Audit, with funding of $32 million over five years;

19

• a comprehensive National Reserve System to protect Australia’s biologicaldiversity, with funding of $80 million over four years; and

• a $100 million Coasts and Clean Seas initiative comprising widespread activitiesover four years to protect coastal areas and complementing the first ever nationaloceans policy.

Further major initiatives to address environment and sustainable agriculture issues suchas the National Landcare Programme, Rivercare, and action on feral animals will bepartially funded from interest from the Trust, together with funding from ConsolidatedRevenue which will be appropriated to the Trust.

At the end of the five years, the remaining $300 million capital will be retained in theTrust and will be invested to create a continuing income stream for recurrentexpenditure on additional environmental and sustainable agriculture projects.

Frameworks are in place to deliver an integrated package of landmark initiatives in themost efficient and effective manner, in cooperation with the States, Territories, theprivate sector and the community.

The Telstra sale legislation is currently before the Senate. Once this legislation, andrelated legislation establishing the Heritage Trust is passed by the Parliament, fundingarrangements for the Trust in 1996-97 which were promised before the election, willcommence.

However, the Government recognises the importance of maintaining core programmesand effective planning to establish a solid launching pad for the Trust. Nearly$30 million has been provided as additional funding for a range of key environmentand natural resource management programmes including funding during 1996-97which will support World Heritage Area management, reserves, endangered species,wetlands, Landcare, the Murray-Darling Basin, improved management of weeds andferal animals, vegetation planning and continuing the momentum on the One BillionTrees, Save the Bush and Corridors of Green programmes.

When the Senate approves the package, the significant funds under the Trust will beable to flow quickly to the areas of high need.

Forests

It is possible to have good development outcomes at the same time as protecting theenvironment.

The Government has injected an additional $49 million to accelerate the developmentof Regional Forest Agreements (RFAs) under the National Forest Policy Statement.The Government’s new timetable addresses community and industry concerns about thetiming of RFAs without compromising the rigour of environmental, economic andsocial assessments. RFAs will create a better climate for long-term investment inAustralia’s forest industries and, in turn, improve the economic security of many

20

regions which depend on forestry. They will also ensure protection for high valueconservation areas.

A new transitional woodchip export regime has been established to alleviate difficultiesfaced by exporters under the previous licensing arrangements. In particular, exporterswill be able to make greater use of sawmill residues and thinnings, which wouldotherwise be wasted. The new arrangements will operate pending the completion ofRFAs.

Native Title

Native title has had its greatest impact in regional Australia, in particular on themining and pastoral industries. During the election campaign the Government gave acommitment to retaining the Native Title Act 1993, but reserved the right to proposeamendments to ensure its workability while respecting the provisions of the RacialDiscrimination Act 1975. Extensive consultations with a broad range of interest groupsfor that purpose have been undertaken and are continuing.

The package of amendments introduced in the Native Title Amendment Bill 1996 andthe further amendments on the right to negotiate and representative Aboriginal andTorres Strait Islander bodies which will be introduced in the Spring Sittings not onlyfulfil the Government’s election commitment but are also in keeping with the principlesestablished by the High Court in Mabo (No 2) in 1992.

It is clear that the Native Title Act in its current form is not producing the certainty thatrural industries need. It has been four years since the High Court decision and well overtwo years since the Act came into operation, yet as at 6 August 1996 there had been390 applications for determination of native title lodged and not one determinationmade; and of 1013 notifications of future acts which have attracted the right tonegotiate, only 29 successful agreements under the right to negotiate provisions.

There have been a number of requests by State and industry for legislation to confirmthat grant of a valid pastoral lease has extinguished native title. The Governmentbelieves in fact — as did the previous government — that native title had beenextinguished by the valid grant of a pastoral lease and has argued this positionstrenuously before the High Court in the recent Wik case. However, the Government’sadvice is that amendments extinguishing native title on valid pastoral leases wouldprobably be inconsistent with the principles of the Racial Discrimination Act and thusinconsistent with our election commitments. We do not propose such legislation.

However, a number of amendments are being proposed to overcome many of thedifficulties currently being experienced by those who have to work with the Act. Theproposed legislative package reflects a balance between the continued recognition andprotection of native title and the economic development of the nation. The amendmentsaim to:

• allow for more diverse activities to take place on pastoral leases;

• reduce the likelihood of more than one native title claim over one area;

21

• reduce the impact of the right to negotiate on mineral exploration and mining andother future land use;

• streamline the processes for determinations of native title by the Courts;

22

• clarify the future role of the National Native Title Tribunal; and

• facilitate greater use of agreements between parties under the Native Title Act.

The proposals also strengthen the responsibilities of the representative bodies byestablishing a statutory framework which will improve their accountability andconsistency of performance. The Government believes that the representative bodies canbring some order to the claims process by conciliating between groups with overlappingclaims.

The Government hopes that the amendments will be passed by the end of the year.

23

Table 1: Outlays MeasuresEffect onOutlays

1996-97 1997-98 1998-99 1999-00

$m $m $m $m

Drought - Additional Funding for Drought Areas Under ExceptionalCircumstances Provisions of Rural Adjustment Scheme

89.6 0.8 0.0 0.0

Commonwealth Scientific and Industrial Research Organisation (CSIRO)Increase in Funding for 1997-98 - 1999-00

8.8 32.0 35.4 38.9

Reduction in the Regional Economic Development Programme -3.8-11.0 0.0 0.0

Capital Funding for Black Spot Roads Programme 36.0 36.7 37.5 38.4

Bass Strait Passenger Vehicle Equalisation Scheme 7.5 8.5 8.5 8.5

Rural Adjustment Scheme - Savings from Normal Component -4.6 -4.3 -4.3 -1.8

Australian Quarantine and Inspection Service - Efficiencies in OperatingCosts

-6.6 -13.8 -10.1 -14.3

Extension of SBS TV to Regional Areas of New South Wales andQueensland

1.9 4.3 4.2 0.7

Regional Arts Fund to Improve Access to Cultural Activities in RegionalAreas

1.5 2.5 3.6 0.0

Regional Touring Fund - Extension of Playing Australia to IncludeIntrastate Touring

0.5 1.0 1.6 0.0

Major Festivals - Development of New Dramatic and Other CulturalPerformances

0.5 0.5 0.5 0.0

Introduction of Pharmacy-Based Medicare Claiming Services 8.7 -0.2 -2.3 -5.7

Establishment of the National Youth Suicide Strategy 3.2 8.7 6.7 0.0

The John Flynn Medical Student Vacation Scholarships 0.4 0.8 1.1 1.5

The Establishment of Six University Departments of Rural Health 3.0 6.0 9.0 9.0

Further Specialist and General Practitioner Rural Locum Support 0.2 0.3 0.3 0.2

The Promotion of Support and Training for Nurse Practitioners 0.2 0.4 0.4 0.0

Additional Increased Funding for the Emergency Relief Programme 5.0 5.0 5.0 5.0

Youth Homelessness Pilot Programme 2.6 4.0 1.6 0.0

Contribution to Facilitation of Regional Mineral Development andGeoscience Mapping

0.3 0.3 0.3 0.3

Abolition of Regional Development Programme -53.1 -55.2 -53.0 -20.9

Inveresk Redevelopment Project - Redevelopment of Inveresk RailwayFacilities in Launceston

3.0 3.1 1.0 0.0

Establishment of the Green Corps Scheme 3.715.5 22.4 0.0

Extension of Marriage/Relationship Education Services 2.0 2.0 2.1 0.0

International Antarctic Centre - Grant to Tasmania 1.0 0.8 0.8 0.0

Axemen’s Hall of Fame 0.1 0.1 0.1 0.0

Improving Access of Aboriginal and Torres Strait Islander Peoples toPrimary Health Care

0.8 6.1 8.3 8.5

Tasmanian Water Quality - Improve Water Quality and Social Amenityof Key Waterways

1.8 3.6 3.6 0.0

National System of Reserves 1.0 0.0 0.0 0.0

Continuation of the Development of the National Pollutant Inventory 1.4 0.0 0.0 0.0

Outlays Measures continued

24

Effect onOutlays

1996-97 1997-98 1998-99 1999-00

$m $m $m $m

Regional Forest Agreements - Expediting the Timing of theComprehensive Regional Forest Assessments

18.7 24.8 5.2 0.0

Continuation of National Vegetation Programmes 2.5 0.0 0.0 0.0

Continuation of World Heritage Areas - Management and Upkeep 0.5 0.0 0.0 0.0

National Feral Animal Control Strategy 4.4 0.0 0.0 0.0

National Weeds Strategy 1.9 0.0 0.0 0.0

Funding for National Landcare Projects 8.0 0.0 0.0 0.0

Endangered Species Programme 1.0 0.0 0.0 0.0

National Wetlands Programme 0.5 0.0 0.0 0.0

Murray-Darling Basin 2001 Initiative - Additional Funding to ImproveNatural Resource Management

4.7 0.0 0.0 0.0

Waste Management Awareness Programme 0.5 0.0 0.0 0.0

Increase Assistance for Isolated Children Correspondence Allowance 0.8 1.6 1.7 1.6

Increase Assistance for Isolated Children Boarding Allowance 1.6 3.2 3.2 3.3

Diesel Fuel Rebate Scheme (DFRS) - Revamp to Curb Overclaiming andContain Growth

-60.0 -123.2 -126.9 -130.7

Strategic Assistance for Research and Development Programme 40.0 100.0 100.0 100.0

Note: Figures in the table are rounded.Measures listed in the order they appear in Budget Statement No. 3

Table 2: Revenue MeasuresEffect on Revenue

1996-97 1997-98 1998-99 1999-00

$m $m $m $m

Capital Gains Tax Rollover Relief - - -150 -160

Fringe Benefits Tax (FBT) on Remote Area Housing in the PrimaryProduction Sector

0 -10 -5 -5

Gift Deductibility - Community Medical Scholarship Schemes - -1 -1 -1

Medicare levy - Gun Buyback Scheme 515 -15 - -

Note: Figures in the table are rounded.